Estate Planning and Probate.
The firm believes very strongly that every individual should appoint a health care surrogate (essentially a medical power of attorney for use during temporary or permanent mental incapacity) and consider having a living will (an advance directive concerning death). As a courtesy to benefit the general public, each of these two forms is available in the download section (on the left) and in the library. The downloadable forms are the statutory forms and they are not necessarily the forms which the firm generally uses and obviously have not been modified to meet individual circumstances. It is essential that the documents be properly executed and then held in a safe but readily accessible location known to the surrogate.
Frequently Asked Questions.
Many people think that estate planning is simply the writing of a will to direct who will administer the estate and who will receive the assets of the estate. Estate planning, however, includes much more than the writing of a will. An estate plan should also protect you in the event of your incapacity and reduce the costs of administration and any potential estate taxes. The best time to plan your estate is now while you can and before it is needed. The following sets out many of the frequently asked estate planning questions:
What happens if I die without a will?
If you fail to plan your estate and die without a will, Florida law will create an estate plan for you. The entire complex system of "intestate" succession or "descent and distribution" is set forth by law. This law prescribes both the persons to whom your property will pass and the division of your estate among those persons. The distributions provided by law are inflexible and may not satisfy your desires as to the distribution of your estate. There may be special problems such as with minor children or a family business. In short, adverse results can occur if you die without a will.
Why can't married people simply hold joint title to all property?
Florida law provides that real and personal property jointly owned by a husband and wife automatically vests with the survivor when one spouse dies. While this initially avoids probate, it:
- Fails to plan for the death of the survivor. A simultaneous death or incapacity would prevent the survivor from making a will.
- Fails to take advantage of federal estate tax avoidance techniques.
- Fails to address other issues such as guardianship for minor children and assets not ordinarily subject to joint ownership.
What is a "simple" will?
The common or simple will provides that everything passes to the surviving spouse, and with the survivor's death, passes equally to the children. If a married couple or a single person has total assets substantially less than $2,000,000 and the children are all adults and from the one marriage, a "simple will" may be all that is necessary. Slight variations may be added for matters such as specific devises (gifts), premature death of a child, and protection of grandchildren.
Why should my will be more than one-page long?
Your will could be drafted to be no longer than one page. The problem, however, is that such a will may not accomplish your objectives for your beneficiaries. We prefer to draft wills to cover various factual and legal situations that reasonably may be expected to arise. Our standard language, often known as "boiler-plate", has a very specific and recognized meaning. Its use is intended to avoid questions of interpretation. The will that we draft for you may be a lengthy document. The burden to you of reviewing and approving a long will may be a blessing to your family when they later find that you have anticipated and addressed what might have been cumbersome problems.
Is a handwritten will legally effective?
Under Florida law, a handwritten will is not treated any differently than a typed will. Accordingly, it is admissible to probate if it is executed and witnessed in accordance with all statutory formalities.
Why should my will be more than one-page long?
Your will could be drafted to be no longer than one page. The problem, however, is that such a will may not accomplish your objectives for your beneficiaries. We prefer to draft wills to cover various factual and legal situations that reasonably may be expected to arise. Our standard language, often known as "boiler-plate", has a very specific and recognized meaning. Its use is intended to avoid questions of interpretation.
The will that we draft for you may be a lengthy document. The burden to you of reviewing and approving a long will may be a blessing to your family when they later find that you have anticipated and addressed what might have been cumbersome problems.
Who will raise my minor children after my death?
If you die leaving unmarried minor children, the other parent ordinarily will raise and support them. If the other parent is not living, however, your minor children will require a "guardian", an individual who is appointed primarily to care for a minor. You may appoint a guardian for your children in your will. If you fail to do so, the court will make the selection of a guardian. We recommend that you assume the responsibility for this important decision rather than leaving it to a judge unfamiliar with your family situation.
If you have planned your estate properly, the guardian of the person should not experience financial strain in raising your children. We usually suggest that upon the death of you and your spouse, a trust be established for your minor children. The trustee should be encouraged to make generous distributions to assist the guardian, and the trustee can be authorized to provide funds to pay for any necessary expansion of the guardian’s home.
How frequently should I review my estate plan?
As a general rule, we suggest that you contact us every four or five years for a conference to review your estate plan and to update the information in your permanent file. We also recommend that you contact us in the event of a dramatic change in your finances or in your family situation. For example, a substantial increase in your estate (through increased life insurance, inheritance, gifts, succesful investments or lottery success), may create opportunities for tax savings, as well as necessitate further family financial planning. A divorce of course, will re-open completely the matter of planning your estate. Likewise, do not hesitate to contact us any time you have question as to whether or not changes in tax or other substantive laws may affect your estate plan.
What is a trust?
A trust is an entity whereby title to property is held by the trustee for the benefit of the beneficiaries. The person creating the trust is commonly referred to as its settlor or grantor. A trust may be either a "living trust" or a "testamentary trust". A living trust is immediately effective and is often used to avoid probate. Ordinarily, it is a revocable trust and may be revised or revoked at any time while the grantor is alive and competent. A testamentary trust is contained within a will (testament) and becomes effective on death. As part of the will, it may be revised at any time while the grantor remains alive and competent. Estate plans sometimes further use other specific trusts such as irrevocable trusts, charitable trusts, and qualified personal residency trusts.
What good is a living trust?
A living trust is generally used for three purposes:
- Avoidance of probate. Probate administration ordinarily results in court costs, personal representative’s fees and attorney’s fees. These expenses may be avoided if all of one’s assets are transferred into an existing (living) trust during the person’s lifetime.
- Independent management. Often an individual creates a living trust with himself as trustee and provision for a successor trustee upon his disability. This often times avoids the necessity of court proceedings for the appointment of a guardian.
- Privacy. Although Florida is very protective of private financial matters in probate proceedings, there is a certain amount of disclosure which would be avoided with a living trust.
Unfortunately, living trusts are sometimes promoted as a "cure all" for everyone. Individual circumstances, however, would determine if a living trust is best for you.
Are there any limitations on what can go in my will?
While there are some restrictions, for example, instructions that would deeply offend public policy, almost anything goes. If you need some inspiration, see our section on the weirdest wills.
What is the significance of my residency?
By In large, the issue of residency governs state taxes. Your state of residency determines if you pay any state income taxes during your life, and any state estate (death and inheritance) taxes on your death. Florida is often considered the most "tax friendly" state. The state has no individual income tax, no gift tax, no inheritance tax, no gift or "additional" estate tax.
What is a designation of a health care surrogate?
Effectively, the designation is a limited power of attorney for medical decisions. It appoints someone to make health care decisions when the maker is unable to do so.
What is a durable power of attorney?
A power of attorney is a writing that appoints another person to act on your behalf as your attorney in fact. Powers of attorney are ordinarily effective only so long as the maker is alive and competent and has not revoked the power. A durable power of attorney is especially useful in that it remains effective during periods of disability. By creating a durable power of attorney, a person may avoid the expense and other costs of formal guardianship proceedings.
What is the federal unified credit?
The federal estate tax and the federal gift tax have been combined ("unified") and one progressive set of rates applies. Effectively, there is no tax until reportable lifetime gifts and the net estate at death reach a value of $2,000,000. Thereafter, there is a progressive tax rate starting at 37%. It is very important to realize that your gross estate and your probate estate (if any) are two distinct concepts. Your gross estate will include the value of all the property in which you own an interest at the time of your death. Additionally, your gross estate may include property that you do not own, but over which you have retained or received certain rights or powers. Thus, it is important to recognize that avoiding probate does not avoid estate taxes.
What is a marital deduction?
The marital deduction in effect allows all transfers to the surviving spouse to be excluded from the adjusted gross estate. In order to qualify for the unlimited marital deduction, property must be transferred to the surviving spouse in a fashion that satisfies the technical requirements of the statute.
The availability of the unlimited marital deduction will allow many estates to pass tax-free to the decedent’s surviving spouse. While this result seems desirable initially, it allows all assets to accumulate with the survivor and potentially increases the ultimate estate tax burden.
When should I plan for avoiding estate taxes?
Once the potential estate of a single person or of a married couple approaches $2,000,000, complex estate tax issues arise and tax planning becomes most important.
What is "administration" of my estate?
Administration of an estate is governed by the probate court; it involves the collection of assets, payment of liabilities, and distribution of properties to the beneficiaries and devisees.
To address the needs of smaller estates and to try to minimize probate expenses, Florida law has special provisions for an expedited administration known as summary administration (property of a value of less than $75,000), and further provides for distribution without administration.
What is a personal representative?
Your personal representative is the person appointed by the court to administer your estate. You may be more familiar with the terms "executor" or "administrator" for such an individual.
What compensation does a personal representative receive?
Florida law provides that a personal representative is entitled to a commission (compensation) based upon the probate estate’s value. Generally, the commission is 3% of the estate value for the first $1,000,000; the percentage is then reduced for that portion of an estate in excess of $1,000,000.
Florida law also provides that the compensation may be separately set by a written contract between the testator and the personal representative. A personal representative may, however, waive his right to all or any part of the commission. This is most significant when the personal representative is also a beneficiary. Compensation earned by a personal representative is subject to income taxes, the inheritance is not.
What compensation does an attorney receive?
Florida law provides that the attorney for the personal representative is also entitled to compensation for his services. The rate for ordinary services is generally 3% of the value of the probate estate. Our firm, however, ordinarily limits its fees to an hourly rate schedule. We find that this creates a significant savings for the estate and still provides us with reasonable compensation for our services.
If you’d like to find out more about working together, please contact us. We’ll have a conversation and see if we are the right attorneys for you, and if you’re the right kind of client for us. We hope to hear from you soon.